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The tax which ticks all the boxes

2019 could be the year when the Frequent Flyers Levy goes mainstream since one of the main political parties, the Labour Party, looks set to back the concept.

In this
blog I make the case that the Frequent Flyers Levy is the closest we’ve got to
a tax which ticks all the boxes.

It could
retain the considerable benefits of aviation while curbing its downsides.

Most holidaymakers would benefit. There would be no tax on the first (return) flight in a year. And that’s all most of us take.

Business wouldn’t lose out. Business flights from the UK only make up 12% of all flights. They could be exempt from the levy.

The Frequent Flyers Levy would retain the benefits of flying while curbing its downsides.

The benefits of aviation are considerable:

Aviation is critical to the international connectivity which facilitates trade that historically has increased prosperity and opened up closed societies.

Cheap flights have brought people real benefits. They have enabled us to go on holiday to places not previously possible, visit family and friends more often and widen the choice of where we work.

One day he will want to travel the world. It’s only right he can do so. Cheap flights must remain. Never again should flying become the preserve of the rich.

But the downsides of aviation cannot be
ignored:

It is a
growing contributor to climate change
and, despite the introduction of less noisy planes, a big noise problem for many communities.

A Frequency Flyers Levy can retain the benefits
of aviation while curbing its downsides.

Here
how:

Everyone gets one tax free return flight each year.

Tax kicks in at a low rate from the second flight, then goes up a notch for each extra flight in that year.

The majority of us would benefit as most people only take one or two flights each year (50% of us don’t fly at all in any one year), while a just tiny handful are taking dozens of flights.

Business flights could be exempt as they make up only 12% of flights.

The beauty
of the tax is that it is on how many
flights we take each year, not on how far
we travel. So people talking the
occasional long-distance flight to visit family on another continent would not
lose out…..and would be likely to gain as Air Passenger Duty currently
increases with the distance travelled.

But somebody must lose out? The Frequent Flyers do.

So who are the frequent flyers?

The 15% of people who take over 70% of all our flights. Not demons; simply people doing what their incomes – and the current tax levels – allow. You can read more about frequent flyers here: http://afreeride.org/

But the growth in aviation – certainly in rich countries – is being driven by increased leisure trips by frequent flyers rather than by business trips.

Curbing climate change and noise

Depending on the level at which it was set a Frequent Flyers Levy could curb climate change emissions and aircraft noise by reducing the number of flights frequent flyers choose to make and thus managing the growth in flight numbers.

Replacing Air Passenger Duty (APD)

APD
currently raises over £3bn a year. It
was brought as aviation fuel is not taxed and there is no VAT on airline
tickets. It is a sort of substitute
tax. But it is a blunt instrument and a
regressive tax.

My own preference would be that the revenues raised by a Frequent Flyers Levy are hypothecated for research and development into cleaner and quieter planes. A tax on an industry which benefits the industry. I told you it ticked all the boxes!